California rental home company expands Nashville portfolio

Apr 07, 2017

Streetlane Homes pays $1.7 million for 18 properties, including in Antioch, Madison, Murfreesboro and Spring Hill.

A San Francisco-based single-family home rental investment and management company has paid $2.4 million for 18 Nashville area properties to expand its local portfolio.

Real estate investor Tim King, left, and his son, Tyler King, stand by one of the two properties they purchased in 2014. King just sold 18 Nashville area homes to Streetlane Homes.(Photo: File / The Tennessean)

Streetlane Homes now owns 272 single-family homes across the region after buying the properties in Antioch, Madison and other areas of Nashville plus in Murfreesboro and Spring Hill from local real estate investor Tim King. The deal follows the real estate investment trust paying local investor Bruce McNeilage just over $400,000 for three rental townhomes in Spring Hill last month.

“They love Nashville and are looking to buy more homes in the $150,000 to $250,000 price range,” said Scott Sunshine, a spokesman for Streetlane, which real estate private equity firms 643 Capital Management of San Francisco and GTIS Partners of New York launched last year.

The 18 homes that Streetlane bought marked King’s first sale from his portfolio of roughly 150 Nashville area single-family rental homes, which he’d amassed over the past 15 years. Now he and McNeilage are among local and regional investors capitalizing on Nashville’s hot real estate market and selling some of their holdings. The buyers include larger national players such as American Homes 4 Rent,   Colony American Homes, Progress Residential and Main Street Renewal, whose interest King said reflects overall confidence in Nashville and future of the local economy.

“Small and medium-sized guys are harvesting some of their profits from these assets we bought several years ago and we’re just looking to deploy that capital into other types of housing,” said McNeilage, president of Franklin-based Kinloch Partners. “I saw it as an excellent time to sell these assets as we did hit a high in the marketplace.”

King, who sold his insurance agency two years ago to focus fully on investing in real estate, plans sales this year of more of his remaining more than 100 single-family rental homes. He plans to invest proceeds into other local real estate projects.

Last fall, King bought 310 apartment units around Nashville plus another 168 units in Huntsville. Eight-Nine King Development, which his son Tyler King leads as president, plans next month to start construction on the 31-townhomes Sky at Fern project at the corner of Fern Avenue and Brick Church Pike in northeast Nashville.

In one transaction with Streetlane, King sold 14 single-family properties in Antioch, Madison and other parts of Nashville for $1.7 million. In a second deal, he sold another four homes in Murfreesboro and Spring Hill to that company for $669,483.

Last fall McNeilage sold 28 single-family homes in the Atlanta area to Streetlane a year and a half selling 42 Nashville area homes to American Homes 4 Rent. He’s invested some of those profits in developments such as the recently opened 121-unit Solo East condos in East Nashville and also bought more than 100 other single-family homes in Atlanta.

With roughly 4,000 homes in its portfolio, Streetlane ranks among the nation’s 10 largest single-family home owner/operators. “We’re actively negotiating several large portfolio acquisitions that could make us the largest privately held single-family home REIT by year’s end,” said Reed Rawlings, the company’s vice president of business development.

In addition to owning and operating single-family homes for its own fund, Streetlane helps other owners with managing their portfolios. The company has a Nashville office.

Millennials are a key target demographic for companies such as Streetlane. “Because of their high debt-to-income ratios including from student loans, they have trouble qualifying for mortgage loans,” said Richard Exton, an appraiser with Manier and Exton in Nashville.

Exton said Streetlane’s $150,000 to $250,000 targeted price range for home purchases makes sense.  “You can rent them for enough to justify the acquisition cost,” he said. “If you get into more higher priced homes, it makes it harder to make the numbers work.”

Reach Getahn Ward at  gward@tennessean.com  or 615-726-5968 and on Twitter  @getahn.

By Bruce McNeilage 14 Dec, 2023
In my interview with Seana Smith & Brad Smith from Yahoo Finance today we discussed single-familiy rental rates and my thoughts on mortgage rates going into 2024.
By Bruce McNeilage 14 Dec, 2023
Owner's equivalent rental prices rose 0.5% in November , a pervasive factor in US inflation as limited housing inventory continues to squeeze homebuyers out of tightened real estate markets. Kinloch Partners CEO Bruce McNeilage joins Yahoo Finance Live to weigh in on the outlook for renters and home purchases in 2024. Home prices are "not going to go down, that's for sure. And mortgage rates might go down, but if the cost of a house goes up $10-20,000, it's a wash," McNeilage states. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. 
By Bruce McNeilage 08 Nov, 2023
Original Story can be found here: https://www.tennessean.com/story/money/real-estate/2023/11/08/renters-seek-new-options-in-nashvilles-tight-housing-market/70652968007/ Charlene and Timothy Stratton traded in their 4-acre Illinois ranch for a rental home in the Nashville suburb of Spring Hill and, so far, they love the new low-maintenance lifestyle. Like a growing contingent of Americans, they chose to rent a single-family house rather than buy a home or rent in multifamily apartment buildings. "We lived in the country all of our lives with horses and cows," said Timothy Stratton, a retired airline mechanic. "But we wanted to rent because we’re looking at our age. We did a lot of research and decided this will work out for the time being." Families like the Strattons increasingly want the mobility and limited commitment of a rental, with the privacy and space of a single-family home. Meanwhile, many families are also being pushed out of the tight housing market. Housing affordability plummeted to historic lows this year, with only 23% of U.S. listings in April considered affordable to households earning $75,000 or less, according to the National Association of Realtors. In response, real estate investors are betting heavily on new rental properties and, increasingly, on standalone units — especially in the South. More than 61,000 fully and semi-detached single-family rental units are under construction in Southern states as of September. In comparison, 28,000 units are in production in the Western U.S., the next-busiest region, according to RealPage Market Analytics. Those units include single-family homes, townhomes, rowhomes, quadruplexes and duplexes. Single-family rental communities are increasingly concentrated in subdivisions with on-site maintenance, rather than in homes nestled in for-sale housing neighborhoods. The Nashville market has the ninth-highest number of in-construction, build-to-rent homes with 2,745 units in the pipeline. Phoenix tops the list with 21,676 units underway, a RealPage analysis in August found. "Construction isn't going fast enough in Nashville. If they built four or five new build-to-rent communities, they would fill them up immediately," said Doug Ressler, the business intelligence director of Yardi Matrix, a real estate data firm. "We really expect Nashville to continue to see growth here." Rent vs. own: 'More house for your money' Charlene Stratton filled the three-bedroom house with festive seasonal crafts and artwork she creates in her home studio. Renting isn't perfect, but there are real perks — like, when the air conditioner stalled on a Saturday afternoon in the middle of summer, the landlord offered to put them in a hotel until maintenance could fix it that Monday. "When something goes wrong, we just call them," Charlene Stratton said. "It's great." The Strattons live at DerryBerry Estates, one of the first of its kind, built in 2019 by Kinloch Parners. The 34-home community sits on former pastures with views of Spring Hill's rolling green landscape and rose bushes in the front yard. Local development companies like Kinloch Partners of Nashville and Franklin-based Chartwell Residential and Barlow Builders have made stakes in the industry. "In 2008, I had no competition. Now there are six or seven players in the market," said Kinloch Partners Co-founder Bruce McNeilage, who sold much of his inventory to American Homes 4 Rent and expanded to South Carolina. "We're 99% leased out." McNeilage said he prioritizes creating a calm, supportive community with competitive prices. Rents at DerryBerry Estates ranged from $2,300 to $2,600 for homes with three to five bedrooms in September. "People are starting families later in life and COVID-19 has allowed people to work out of their houses so people are moving farther out," McNeilage added. "Housing prices are going up and interest prices just doubled. You can get more house for your money if you get farther out." Housing in Nashville area: 'Can't build them fast enough' Chartwell Residential, a local real estate firm specializing in multifamily apartments, is now building out its first single-family rental home community. https://www.tennessean.com/story/money/real-estate/2023/11/08/renters-seek-new-options-in-nashvilles-tight-housing-market/70652968007/ https://www.tennessean.com/story/money/real-estate/2023/11/08/renters-seek-new-options-in-nashvilles-tight-housing-market/70652968007/ https://www.tennessean.com/story/money/real-estate/2023/11/08/renters-seek-new-options-in-nashvilles-tight-housing-market/70652968007/ https://www.tennessean.com/story/money/real-estate/2023/11/08/renters-seek-new-options-in-nashvilles-tight-housing-market/70652968007/ https://www.tennessean.com/story/money/real-estate/2023/11/08/renters-seek-new-options-in-nashvilles-tight-housing-market/70652968007/ https://www.tennessean.com/story/money/real-estate/2023/11/08/renters-seek-new-options-in-nashvilles-tight-housing-market/70652968007/
By Bruce McNeilage 15 Jul, 2023
NASHVILLE, Tenn. (WKRN) — High prices and high-interest rates have kept many from buying a single-family home in a quiet suburban neighborhood. But what if you could rent one? Developers say they are seeing a big demand for build-to-rent communities. Upon first glance at the DerryBerry Estates subdivision, you might assume the single-family homes are for sale, but they are not—each one is a rental. “People are very happy with what we are providing,” said Bruce McNeilage, CEO/co-founder, Kinloch Partners. Bruce McNeilage built DerryBerry Estates in Spring Hill a few years ago. He saw some families struggling to afford a single-family home in the suburbs, but still craving that lifestyle. “Their kids are getting older, they want to be in good schools, you want to ride a bike around, and you just can’t do that in an apartment complex.” No sharing walls at DerryBerry Estates, or Fairview Station, the other rental home community Kinloch Partners built in western Williamson County. DerryBerry Estates subdivision has 41 single-family homes with 3 and 4 bedrooms and rents in the $2,300 to $2,500 range; and all the trappings of the suburban lifestyle. “They have front porches, they have covered back porches, two-car garage. They have all the amenities and appointments on the interior that one would want in a house for sale, but these are available for rent.” Who would be interested in an all-rental community? McNeilage said his tenants are often folks new to town testing out the neighborhood, young families who can’t afford just yet to buy, those looking for a low-maintenance lifestyle, and senior citizens, which make up 10% of his tenants. “They don’t want to live in an apartment and share walls with someone. They want to live in a single-family home in the suburbs to probably be real close to their grandchildren.” McNeilage has a couple of rental communities in Middle Tennessee, as well as out of state. And with housing prices staying high, he sees the popularity of rental communities sticking around “I could build 100 houses. I could build another 100 houses. I really have a demand that I can’t keep up with.” McNeilage said that his tenant turnover is lower than an apartment complex. People will stay in his homes 3-4 years on average, but for apartment complexes, it’s 1.5 years. 
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